Public Policy Detail
Vermont workers with young children face an escalating social and economic crisis. Our state, like the nation, has seen a dramatic increase in the number of families in which both parents work. The result is a lack of quality, affordable child care. This problem has a direct impact on business, both in terms of today's workforce and the workforce of the future.
According to the Annie E. Casey Foundation, 75% of Vermont children under six have working parents. This translates into more than 20,000 Vermont children under six who are in child care while their parents work. Over the last 12 years, the percentage of women in Vermont's labor force who have children under six grew from 52% to 75%.1 For most two-parent families, the decision to have both parents working was made out of economic necessity, following the sharp decline in median family income that began in the early 1970s.
The Problem
The three fundamental child care issues that impact parents, and therefore impact business, are access, cost and quality.
Access
In a survey of Vermont child care providers completed by the Vermont Child Care Services Division in March 2001, 75% of the child care centers responding to the survey had a waiting list and nearly half (45%) of all centers were forced to turn families away!2 Lack of child care can force employees to quit their jobs or delay returning to work.
75% of the child care centers responding to the survey had a waiting list and nearly half (45%) of all centers were forced to turn families away!
Cost
According to the Vermont Agency of Human Services, the average cost of quality child care in Vermont is $5,500 per year, per child.3 The cost of child care is the second greatest cost (behind housing) for Vermont's single parents with one or two children. Child care ties with transportation as the second greatest cost for urban two-parent families with both parents working.4 Significant financial burdens such as childcare can contribute to employee stress and productivity.
Quality
The quality of care a child care center provides can be linked to the following indicators:
Education among staff:
In the 2001 Vermont Child Care Services survey, nearly half of the respondents (45%) did not have a Bachelors degree in early childhood education or related fields. Furthermore, only 20% were certified by the Child Development Association (CDA) and 6% were Certified Childcare Professional (CCP).5
Accreditation of centers:
Only 16% of centers in Vermont are accredited by the National Association for the Education of Young Children (NAEYC).6
Compensation & benefits for providers:
Among registered family care providers in Vermont in 1999, 55% had an annual income from this work of under $10,000; only 14% earned over $20,000. Average hourly wages for new hires at licensed centers ranged from $7.21 - $8.56 for teachers, from $9.92 - $11.69 for program directors. 57% of child care centers and 13% of child care homes do not have health insurance for their staff. Partly because compensation & benefits are so low, the turnover in staff ranges from 26-40% annually.7
Why the Problem Matters
Research shows that high quality child care provides children with the intellectual and social tools to succeed in school and in life.8 Children need quality environments in and out of the home, yet large numbers of children are placed in child care arrangements that do not meet quality standards.
The Impact on Business
The impact of the child care crisis on business is significant. Unsatisfactory or non-existent child care arrangements result in employee absenteeism, high turnover, low productivity and poor morale. Productivity can also suffer - employee parents worried about the well-being of their children are not focused on their work. Furthermore, businesses may face additional issues in the future with employees who have been affected by inadequate care and learning during their early years. Today's children are tomorrow's workforce.
Businesses need reliable child care to address these problems, but few businesses can manage these problems single-handedly. To take on this crisis, businesses, parents and communities must form broad-based partnerships to infuse the child care system with business expertise and resources, increase employee access to care, improve the quality of care and guarantee care providers a reasonable compensation for their essential work.
According to a national study by the Families and Work Institute, the quality of employee's jobs and the supportiveness of their workplaces are far more important predictors of job satisfaction, commitment, performance and retention than earnings or fringe benefits.9
The business role is vital in addressing the crisis. The business voice is powerful in communities and public policy decision-making. Business people who contact their legislators or serve on task forces or commissions can raise awareness of the issues and the urgent need.
Internally, businesses can develop workplace initiatives such as:
- offer flexible scheduling,
- offer parental leave,
- help to enroll employees in the state child care subsidy program,
- offer Cafeteria and flexible spending plans that allow employees to use pre-tax dollars to pay child care expenses,
- provide livable jobs so that employees can afford quality child care, o provide employees with information on child care resources, and
- provide technical expertise and in-kind services to child care programs and providers.
VBSR supports legislative policies that would:
- create incentives for providers to pursue further education, training, and accreditation;
- create a task force on health insurance access and affordability for child care providers;
- address access for children with special needs; and
- encourage private charitable investments in quality child care.
Conclusion
Childcare affordability, availability and quality have direct impacts on business. Affordable, quality child care helps employers recruit and retain the best employees, maintain or improve productivity and limit turnover, and help ensure a quality workforce for the future.
Footnotes
1 "The State of Child Care - An Executive Summary of the March 2001 Report by the Vermont Child Care Services Division", 2001.
2 Id.
3 FY1999 Report to the Legislature, Vermont Agency of Human Services.
4 "The Vermont Job Gap Study," Peace and Justice Center, 1998 Update, August 1999 (http://www.vtlivablewage.org/jobgapstudy.html).
5 "Vermont Child Care: A Study of Wages, Credentials, Benefits and Market Rates," Child Care Services Division, July 2000 (http://www.state.vt.us/srs/childcare/marketsurvey.pdf).
6 Id.
7 Id.
8 Schulman, Karen; Blank, Helen: Ewen, Danielle, "A Fragile Foundation: State Child Care Assistance Policies," Children's Defense Fund, November 2001.
9 "1997 National Study of the Changing Workforce," Families and Work Institute, 1997 (http://www.familiesandwork.org/announce/workforce.html).
